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Last year
everybody was an expert on it. Now some of the pros don’t even mention
that S&P Global Ratings will be announcing its latest assessment of
South Africa’s debt this week.

The country’s prospects are very different from when S&P cut its
local-currency assessment to junk and lowered the foreign-currency debt
to two levels below investment grade on November 24. The ratings company is
scheduled to publish its six-monthly review on Friday.

Cyril Ramaphosa’s rise to power since December initially boosted
sentiment and the rand following former President
Jacob Zuma’s scandal-ridden tenure of almost nine years, during which
South Africa lost the investment-grade status it had held with S&P
and Fitch Ratings since 2000.

But the nation paid a premium when it sold its first Eurobond under
Ramaphosa last week on a day when emerging-market currencies fell the
most since June 2016 and yields surged as rising US rates attracted
money to dollar assets.

Confidence indexes have dropped to levels they were at before
Ramaphosa’s tenure started as businesses seek real reforms in the
economy.
Despite this, investors have toned down their view of the nation’s
riskiness.

The cost of insuring against non-payment of debt for five
years using credit-default swaps has dropped 41 basis points from the
high it reach in November. It’s still higher than Russia’s, but has
moved below that of Turkey and Brazil.

Moody’s Investors Service kept its assessment of South Africa’s debt
at investment grade in March and changed its outlook to stable from
negative.

It’s the first time in more than six years that the nation
doesn’t have a negative outlook with any of the three major ratings
companies, suggesting that the credit assessments could stay unchanged
for a while.